Fight Rages Over Land Reform in South Africa

Property rights are in danger in South Africa. A mix of revenge and socialist ideology are behind the expropriation without compensation policy amendments that changed the South Africa Constitution. It has been more than one year when in February 2017, Julius Malema, leader of the Economic Freedom Fighters Party (EFF), proposed a motion that would have amended section 25 of the Constitution of South Africa to allow for expropriation of land without compensation. It was resoundingly defeated, 261-33. However, a year later, and with a new South Africa president Cyril Ramaphosa, the call for expropriation without compensation is gaining steam. With some amendments proposed by the African National Congress (ANC), the motion was approved by a wide margin. The stage was set for allowing the South African government to take land without just compensation, and reallocating it as they see fit. Now the Constitutional Review Committee will start reviewing section 25 of the Constitution while it will report back to the National Assembly by August 30.

“The myriad rights which South Africans enjoy were won after decades of struggle against the state. With the recent proposal to amend Section 25 of the Constitution to allow for expropriation without compensation,” Chris Hattingh, researcher of the Free Market Foundation, said, “the ANC and EFF trample over the sacrifices made by those who fought against colonialism and apartheid. Under those socialist systems the state decided which South Africans could be secure in their property. We will be subjected to that same violation of individual rights if the Constitution is amended along the lines proposed.”

Land reform has been a hot topic in South African politics since the inception of the country’s democracy. In 1994, the ruling ANC adopted as its priority to transfer 30% of white owned land to blacks by 2000. Recent records show that the government has only transferred about 10% of this land. This inability of the ANC to accomplish its stated goal, combined with unemployment rates of as high as 37%(!) led to the rise of the extremist EFF, forcing the ANC to alter its goals and message. Expropriation without compensation was adopted as policy by the ANC at its 54th conference in late 2017.

FILE - In this Friday, Feb. 16, 2018 file photo, South Africa's new President, Cyril Ramaphosa, delivers his State of the Nation address in parliament in Cape Town, South Africa. Ramaphosa says the transfer of some land from the country's white minority to the black majority will be handled without damaging the economy and that there will be "no smash and grab". South Africa seeks to address the legacy of apartheid more than two decades after the end of white rule. Ramaphosa said Thursday, March 1 that the transfer will be handled through dialogue. (AP Photo/Ruvan Boshoff, File)

Originally operating under the system of “willing seller, willing buyer”, the ANC failed in its mission to transfer 30% of land by 2000. To make matters worse, much of the land that was transferred from whites was not used productively. Many farms failed because the new owners did not have the necessary skills to run commercial farms. Even worse, the government has stopped transferring expropriated land in some cases out of fear that the new owners will turn around and sell it to whites. This has resulted in about 70% of the land transferred by the state since apartheid now being fallow.

To hasten the land expropriation process, the ANC has now joined with the EFF in a push to amend the constitution to allow for expropriation without compensation. However, one should be wary of the effects of such a policy.

Under former president Robert Mugabe, Zimbabwe pursued a similar land grab policy in order to transfer land from whites to blacks. When Zimbabwe enacted land “reform” in 2000, the country has 4,500 white commercial farmers that contributed massively to the country’s agricultural production. Now, less than 20 years since, under 300 remain. The coffee and tea business in Zimbabwe plummeted, with all but 3 of the nearly 500 coffee companies shutting down.

The economic collapse of Zimbabwe after Robert Mugabe’s land grab should serve as a stark warning to South African leaders who are pursuing much of the same policy. With land being able to be grabbed without compensation, there is increased uncertainty in the market, and rule of law becomes almost non-existent. This deters international investors and the business community from doing business in the country.